Richmond VA's Economy

Major Industries and Employment

The Richmond Metropolitan Statistical Area (MSA) boasts a diverse employment base with no single sector dominating. As of late 2024, total nonfarm employment in the Richmond MSA was about 741,100 jobs.¹ The largest sectors by employment were:

• Trade, Transportation & Utilities: ~138,000 jobs (encompassing retail/wholesale trade, logistics, and utilities)
• Professional & Business Services: ~121,400 jobs (including many corporate, tech, and professional roles)
• Government: ~119,800 jobs (federal, state, and local government, reflecting Richmond's role as Virginia's capital)
• Educational & Health Services: ~117,000 jobs (healthcare networks, hospitals, and educational institutions)
• Leisure & Hospitality: ~69,000 jobs (tourism, restaurants, hotels, and entertainment venues)
• Financial Activities: ~58,300 jobs (banking, insurance, real estate - Richmond is a finance hub with a high concentration of finance workers)²
• Manufacturing: ~32,000 jobs (diverse manufacturing, including pharmaceuticals, chemicals, and advanced materials)
• Construction (incl. Mining/Logging): ~45,300 jobs (robust construction industry supported by regional growth)
• Information: ~6,900 jobs (telecommunications, media, and data services - a relatively small sector)
• Other Services: ~33,400 jobs (various services such as personal services, nonprofits, etc.)

Importantly, the vast majority of employment is in the private sector. Government jobs (about 119.8k) account for roughly 16% of all nonfarm jobs, implying about 84% of workers are in private industry. The region's economic diversity and balance between sectors have helped insulate it from extreme swings, as no single industry dominates the labor market. Notably, Greater Richmond's logistics and supply chain sector is a key employer - over 53,000 workers are employed in logistics/warehousing and related supply chain occupations, taking advantage of the area's strategic mid-Atlantic location and infrastructure.³ The finance sector is another strength; the region has the 6th highest concentration of business and finance workers on the East Coast, with several Fortune 500 companies (such as Capital One and Altria) headquartered in the area.⁴

Economic Output and GDP

The Richmond metro area's economy is one of the largest in the Mid-Atlantic. The gross domestic product (GDP) of the Richmond MSA was approximately $117 billion in 2023 (nominal).⁵ This marks a strong expansion in recent years - for comparison, the region's GDP was about $93 billion in 2020, demonstrating significant growth coming out of the pandemic period. By GDP, Richmond ranks among the top 50 largest U.S. metro economies. Key contributors to economic output include finance/insurance, government services, and manufacturing, as well as the professional/business services sector. According to the U.S. Bureau of Economic Analysis, Richmond's economy (in real terms) has been growing at a pace outpacing many peer regions. For instance, between 2021 and 2022 the MSA saw a notable jump in output as industries like finance, logistics, and health services expanded.

Labor Force and Employment Trends

Richmond's labor market is generally robust. The labor force - defined as the number of people working or actively seeking work - in the MSA is roughly 728,000-730,000 in recent data. ⁶ The region's unemployment rate currently sits around 3% (as of late 2024/early 2025), which indicates full employment by common economic standards. For example, the unemployment rate averaged about 3.0% over 2024, and was approximately 3.2% as of September 2024 (down slightly from 3.3% a year prior).⁷ This is on par with or slightly better than the national unemployment rate, reflecting a healthy job market.

Another positive sign is the high labor force participation rate in the Richmond area. About 66.9% of the region's population aged 16 and over is in the labor force (either employed or looking for work).⁸ This participation rate is above the national average (around 63.5% participation), indicating a comparatively larger share of Richmond's working-age population is engaged in the job market. A combination of steady job creation and population growth has kept the labor force participation strong. In fact, the Richmond metro led Virginia in population growth from 2020 to 2023, which has contributed to an expanding workforce.⁹

Richmond's Public vs. Private Sector

The Richmond region has a significant government employment presence (state government agencies, federal offices, and large military-related facilities in the vicinity), but overall the private sector employs roughly five times more workers than the public sector. The ratio of private-to-public employment is about 5:1, as noted earlier (only ~16% of jobs are government roles).

Industry Trends in Richmond

Recent job growth in the MSA has been led by sectors such as construction, transportation and warehousing, and health services. For example, over the year 2024, the education and health services sector added the most jobs (a gain of about +9,300 jobs, +8.6%) as new hospitals, clinics, and educational institutions expanded. The transportation and warehousing component (within Trade/Transportation) has also been buoyed by Richmond's role as a logistics hub, benefitting from e-commerce growth. Meanwhile, manufacturing employment has been relatively stable, and the information sector (which includes telecommunications and media) remains a small slice of the pie. Overall, Richmond's year-over-year job growth was about 3.1% as of December 2024, more than double the national job growth rate of 1.4% at that time. This strong performance highlights the region's post-pandemic recovery and economic momentum.

Income and Wages

Incomes in the Richmond MSA are relatively high, compared to cost of living, and wage growth has been steady. The median household income in the region is about $84,300 per year,¹⁰ which is roughly 8-10% higher than the U.S. median household income (around $77,700). Likewise, per capita income in Richmond (approximately $46,000) is about 10% above the national average. These figures reflect the presence of many high-paying employers (finance, law, government, etc.) and a well-educated workforce.

Wage growth in Richmond VA

In recent years, wages have been growing moderately. As of early 2024, Richmond's average wage growth was about +2.3% year-over-year, essentially mirroring the national wage growth rate.¹¹ Over the past few years, Richmond's wage growth has fluctuated quarter-to-quarter but overall has slightly outpaced the U.S. average. The average annual wage per worker in the region is approximately $66,300 (as of 2024 Q1), which is a bit below the U.S. average annual wage (~$70,900). In other words, Richmond's workers earn about 6-7% less on average than the national mean - partly because the cost of living is lower (and because the region's job mix includes fewer ultra-high-cost tech jobs than, say, Silicon Valley). It's worth noting that when adjusted for the cost of living, real purchasing power in Richmond is strong, given the combination of decent wages and below-average living costs.

Cost of Living and Housing

Greater Richmond offers a high quality of life with a cost of living below the national benchmark. According to the Center for Community and Economic Research's index, the Richmond MSA's overall cost of living index was 94.8 in Q3 2024 (with 100 being the U.S. average).¹² This means living expenses in Richmond are roughly 5% lower than the national average. Major everyday costs - from groceries to utilities - tend to be at or under U.S. norms. Notably, housing costs in Richmond are a bargain relative to many metros; housing was about 14% cheaper than the U.S. average in that 2024 survey. Lower housing costs (which make up the largest portion of most households' budgets) greatly contribute to Richmond's affordability advantage.

Housing Affordability

The median home prices in the Richmond region have risen in recent years due to strong demand, but homeownership remains generally attainable for many local residents thanks to higher incomes and lower prices compared to larger East Coast cities. For example, the median sales price of an existing single-family home in the Richmond area was around $405,000 as of late 2024 - significantly lower than median home prices in Washington, DC or the Northeast.¹³ Paired with the area's median family incomes, Richmond's home price-to-income ratios and mortgage burden percentages are better (lower) than those in most major markets.¹⁴ In practical terms, a typical Richmond family spends about 22-25% of their income on the monthly mortgage for a median-priced home, which is on par with the national affordability level. By another metric (the Housing Opportunity Index), Richmond often ranks as more affordable than many U.S. metros its size. Additionally, rents in the Richmond region are moderate - the median rent is affordable relative to incomes, helping the area avoid the severe housing crunch seen in

some cities. Overall, Richmond's combination of moderate housing costs and above-average incomes yields a favorable affordability profile for residents.

Other Economic Indicators

Unemployment & Labor Force

Richmond's unemployment has remained low, as mentioned, and the region has consistently been at “full employment.” Labor force participation (~67%) being higher than average suggests fewer people on the sidelines and a greater proportion of adults either working or seeking work. This can be attributed to factors like the region's economic growth attracting workers, a relatively young working-age population, and the presence of ample job opportunities across skill levels. The MSA's population growth (the region has grown to ~1.35 million people) also feeds the labor force.¹⁵ Importantly, Richmond has been successful in drawing talent: net migration into the region has been positive, including both new college graduates and professionals drawn by the area's job market and lifestyle.

Richmond VA's Poverty Rate

The benefits of Richmond's growing economy are reflected in its relatively low poverty rate. About 9.9% of the Richmond MSA's residents live below the poverty line, which is significantly lower than the national poverty rate (~12.5%). Richmond's poverty rate has declined over the past decade, thanks in part to job growth and workforce development efforts. That said, like many metros, poverty is concentrated in certain urban and rural pockets, and local governments continue to focus on inclusive growth to lift all communities.

Business Climate and Formation

The Richmond region's economy is dynamic, with a healthy rate of new business formation and expansion. Even during the disruptions of the COVID-19 pandemic, entrepreneurship remained robust. For instance, between March 2020 and March 2021, there were 30,028 new business establishments opened in Virginia versus 26,216 that closed, yielding a net gain of 3,812 establishments statewide.¹⁶ A substantial portion of those openings were in the Richmond area, which has been touted as an emerging hotspot for startups and small businesses. In fact, small businesses (those with fewer than 500 employees) make up 99.5% of all Virginia businesses, and Richmond's share reflects a strong small-business ecosystem.¹⁷ Organizations like Startup Virginia and Activation Capital, along with area universities, have bolstered the startup scene, contributing to steady new firm creation. Additionally, new business applications (as tracked by the Census Bureau's Business Formation Statistics) have been elevated in the Richmond region in recent years, indicating confidence in the local economy.

Major Companies in Richmond VA

Richmond's economy benefits from the presence of numerous major employers. The region is headquarters to 8 Fortune 500 companies and several Fortune 1000 companies, spanning industries such as finance (Capital One Financial), tobacco (Altria Group), energy (Dominion Energy), logistics (Performance Food Group), and insurance (Markel). These large firms not only provide thousands of high-paying jobs but also help attract a network of suppliers and professional services. The public sector is anchored by the state government (Capitol Square downtown hosts many agencies) and significant federal facilities (e.g. the Federal Reserve Bank of Richmond, Defense Supply Center Richmond, and nearby Fort Gregg-Adams/US Army Logistics University), which together inject billions into the local economy.

Economic Development and Outlook

Regional economic development authorities (like the Greater Richmond Partnership and Virginia Economic Development Partnership) report continued investment and expansion. The gross regional product has been growing at a solid clip; real GDP growth for Richmond outpaced the U.S. average in the most recent data, thanks in part to expansions in finance, logistics, and tech services. Looking ahead, Richmond's economy is positioned for sustainable growth. The area enjoys competitive advantages such as a central location on the East Coast (within a day's drive of ~45% of the U.S. population), a stable and diverse employer base, and lower operating costs that attract new businesses.¹⁸ Workforce quality is another strength - nearly 42% of the region's adults hold a bachelor's degree or higher, supplying talent for knowledge-driven industries.¹⁹

In summary, the Richmond MSA's economy is characterized by diversified industries, steady growth in output and jobs, low unemployment, and a favorable cost structure for businesses and residents alike. Key metrics underscore this prosperity: a $117 billion GDP, rising employment across sectors, a cost-of-living index ~5% below the U.S., and healthy indicators like strong labor force participation and low poverty.²⁰ These factors combine to make Greater Richmond one of the leading economic regions in the Southeastern U.S., with a positive outlook for continued expansion.